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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in FB Financial Corporation (NYSE:FBK).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
FB Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Vice Chairman of the Board James Ayers bought US$1.3m worth of shares at a price of US$22.32 per share. Even though the purchase was made at a significantly lower price than the recent price (US$43.20), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 100.19k shares worth US$2.3m. But insiders sold 37.33k shares worth US$1.3m. In the last twelve months there was more buying than selling by FB Financial insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
FB Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at FB Financial Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at FB Financial. In total, insiders dumped US$818k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does FB Financial Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that FB Financial insiders own 30% of the company, worth about US$628m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At FB Financial Tell Us?
Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So the recent selling doesn't worry us. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that FB Financial has 5 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
Of course FB Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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